When the employer cannot pay

If the employer cannot pay due to insolvency, the company might be declared bankrupt. When bankruptcy occurs, you can seek coverage from the Norwegian Wage Guarantee Scheme, which is administrated by Labour and Welfare Administration (NAV).

Notice that there are certain time limits with regard to the possibility of getting your claims covered by the Wage Guarantee Scheme. By not proceeding, e.g waiting for others file a petition in bankruptcy, you risk that your claims are too old to be covered. Reasonable expenses you receive in connection with the bankruptcy petition, such as fees, attorney's fees may also be covered.

Unless the employer declares him or her self insolvent, and sends in a bankruptcy petition to the district court, you will need to proceed as follows:

When wages is absent: Demand 

If you do not get paid on time, you must as soon as possible send a registered letter (demand) to the employer where you claim payment within a short period, e.g. 7 to 10 days. The letter must state the claim, the earning period, and the amount the employer owes you.

When the employer fails to pay on demand: Bankruptcy notice

Four weeks after you sent the registered letter, you write a payment request (bankruptcy notice). This shall be given to the employer by a public official, see below.

The contents of the bankruptcy notice:

  • Refer to the demand you sent earlier. Reiterate the amount the employer owes you, the claim and the earning period. 
  • The demand has to state a two week time limit for payment from the service of the bankruptcy notice.
  • Write that "The creditor has the right to submit a bankruptcy petition if payment is not made within the time limit." 
  • You must also state that "insolvency is assumed to be present, as bankruptcy petition is heard, when the creditor has followed the procedure as stated in the Bankruptcy Act section 63". 

Proclamation 

Bankruptcy notice must be send to the enforcement officer where the employer is located (in the cities this is an office, in rural areas it is often the local police. Municipal administration will be able to provide further details). 

The enforcement officer will proclaim the bankruptcy notice to the employer. This service costs as of 1th of January 2012 430 kroner. You will get information when the service is performed. 

If the employer still does not pay: Bankruptcy Petition 
When the two-week time limit in the bankruptcy notice has expired, you must send a bankruptcy petition to the district court. The petition must be submitted in five copies. These must be received by the court within two weeks as from the payment time limit stated in the bankruptcy notice. If you wait longer, the bankruptcy notice must be sent one more time. 

It is important that the bankruptcy petition is formally correct. Note that the petition must be written in Norwegian. 

The bankruptcy petition shall be in writing, and must include:

  • Name and address of the plaintiff (you) and defendant (employer). 
  • The employer's enterprise number (from the Central Coordinating Register for Legal Entities see below). 
  • The basis for the bankruptcy, i.e. the amount that the employer owes you, the earning period and type of claims (wages, vacation pay, etc.).
  • That you request the defendant estate to be subject for insolvency proceedings. 
  • Documentation to prove that you are employed/have an employment relationship with the defendant. Attach a copy of the certificate of registration, claims and bankruptcy notification letter with the payment request. 
  • Signature. 


If the employer is a company, the bankruptcy petition with attachments must be submitted in five copies to the district court in the municipality where the employer has his place of business. 

If the employer is a person or a sole proprietorship, send petition to the court in the municipality where the employer lives. You can get information at Brønnøysundregistrene on which municipality you shall send it to. Also ask about the company certificate of registration that you attach to the bankruptcy petition. 

You can read more about Brønnøysundregistrene here (brreg.no)

At the same time as you submit your petition, you have to seek the court for exemption from providing a guarantee for the costs of bankruptcy proceedings. You can add the Wage Guarantee Scheme application form, Form A, that will give the court most of the information needed to decide whether to grant the exemption or not. When the court treats the bankruptcy petition, you must appear in court and explain your claim. 

If the result of the court meeting is that bankruptcy proceedings are instituted, you must apply wage guarantee coverage by enrolling your claim to the trustee. 

Although the requirements are too old, by the general rule, to be covered by the Wage Guaranteed Scheme, they can still be covered if you have started, and complied, the procedures mentioned above. 

To ensure your rights to wage guarantee coverage, it is important that you act quickly. As the recovery process can be complicated and there are strict formal requirements on how to proceed to bankruptcy, it may be convenient to entrust the work to a lawyer. Expenses you get may be covered by warranty.


Salary 
In Norway wages are, in general, not regulated by law. Wages are based on agreements between employer and employee, or regulated by collective agreements. It is therefore very important that the question of wages is governed by the individual contract of employment. 

An exception to the general rule applies in the construction industry, shipping and shipbuilding industry, cleaning industry and in agriculture - and horticulture industries. In these industries it has been introduced general application of collective agreements which, among other things, regulate the employee's salary to prescribed minimum wage rates. 

Many companies have collective agreements. Collective agreements are agreements on wages and other rights and duties between employer and employees. These collective agreements are normally negotiated by employer associations and trade unions. 

Contact your employer or trade union representative for more information about current collective agreements that might regulate rights and duties e.g. on salary. 

The Role of the Norwegian Labour Inspection Authority

The Norwegian Labour Inspection Authority provides guidance on the procedure when you do not receive wages or holiday pay, as well as the regulations concerning payment of wages, overtime pay and holiday pay issues. In general the Labour Inspection has no authority to give orders in such cases. Disputes may only be settled by the courts.

However, the Labour Inspection has the authority to give orders on regulations on general application of collective agreements and overtime payment for future overtime work.